Order 1

Order Details: Notice of Motion
Pdf Text: : 1 : Notice of Motion No.1356 of 2018
CNR No.MHCC010042892018
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
NOTICE OF MOTION NO.1356 OF 2018
IN
S.C. SUIT NO.1826 OF 2018
Nahar Builders Ltd. .. Plaintiff.
Versus
Lillium Lantana Coop. Hsg. Society. .. Defendant
Appearance :
Advocate Sonal for Plaintiff.
Advocate Jitendra Tiwari for defendant.
CORAM : HIS HONOUR JUDGE
SHRI ANAND L. YAWALKAR
(COURT ROOM NO. 31)
DATED : 29.01.2019
: ORDER :
This Notice of Motion is taken out by plaintiff for restraining
the defendant by way of injunction from transferring or giving no
objection certificate to letting, subletting, selling, assigning or from
giving the suit flat on leave and license basis in any manner during the
pendency of the suit.
2. Counsel for Plaintiff submitted that the plaintiff is a company
incorporated under the Companies Act, 1956. Defendant is a Co
operative Society. Plaintiff is developing the larger property situated at
Chandivali, Mumbai, which is divided into 22 sectors. This suit is
relating R12 Sector on which 21 buildings were proposed to be
-- 1 of 12 --
: 2 : Notice of Motion No.1356 of 2018
constructed and out of which 20 buildings are constructed.
Accordingly, Lilum Lantana Cooperative Housing Society Limited
was registered alongwith Yarrow Yucca and Vinca Cooperative
Housing Society Limited. Similarly, 6 other Cooperative Housing
Societies are formed and 3 are yet to be formed. According to the
plaintiff they had handed over the possession of the suit flat to
respective purchasers who is the member of defendant society. Plaintiff
referred to the agreement for sale and Clause20 wherein the
purchasers had agreed not to create third party interest in the suit flat
till all the dues of the plaintiff are cleared. Similar as per Clause27
Apex body/federation was to be formed for management, maintenance
and control of area in R12 sector. As per clause 45 till the formation
of Apex Body plaintiff was to maintain the common area in R12
sector and the purchasers were liable to pay such expenses as incurred
by the plaintiff for maintenance of the common area in R12 sector.
Plaintiff had incurred the expenses on Apex Body till February, 2012.
From March, 2012 plaintiff started billing the members of the said
society for their proportionate share of the Apex Body expenditure
of R12 sector. They also opened account with Union Bank of India
in the name of proposed Federation for R12 sector. Plaintiff requested
the defendant on 20.04.2013, 15.04.2013, 23.03.2013 and 16.02,2013
to make the payments. Similarly, letter was written on 05.12.2015 to
the society to make outstanding payment. Similarly again letter was
written on 17.08.2017. Society replied to their letter on 26.10.2017 and
denied its liability. Plaintiff again wrote a letter on 12.12.2017 for
payment of dues and in respect of Apex Body expenditure, whereby the
plaintiff asked the society not to transfer any flat or share in the society
unless no dues certificate was issued by the plaintiff. As the society
refused to collect the share and pay to the plaintiff, they issued copy of
-- 2 of 12 --
: 3 : Notice of Motion No.1356 of 2018
invoice to the purchasers on 27.01.2018 and calling upon him to pay
the proportionate charges. As the defendant failed to pay the charges
society has filed the suit before the court.
3. Defendant appeared and submitted that the suit is barred by
limitation. Mandatory notice u/s. 164 of Maharashtra Cooperative
Societies Act, 1960 (MCS Act) was not given as the dispute is touching
the business of society and due to this the suit is not maintainable. It
was further contended that there is no privity of contract between the
plaintiff and defendant and due to this they are not liable to recover
the amount for plaintiff. It was further submitted that as the projects
in R12 sector are not completed and it is sole liability and responsibility
of the plaintiff to look after and manage the common area. The
defendant agreed about 21 buildings in R12 sector for formation
of cooperative societies. It is also contended that blanket consent is
obtained by the plaintiff in agreement for sale which is not consent
in eyes of law. They also referred regarding the correspondence
between the defendant and the plaintiff and submitted that without
providing details the bills are being raised. Plaintiff had not conveyed
the land in their favour. They referred to clause 38(d) of their Bye
Laws regarding grant of No Objection Certificate (NOC) and
submitted that as per their byelaws NOC is not required to
transfer the shares and interest in the society. Thus, they cannot insist
on NOC. They again contended that agreed facilities are not provided
by the plaintiff and they are recovering charges which they are not
liable to recover and prayed to dismiss the motion.
4. Ld. Counsel Sonal for plaintiff submitted that the plaintiff is
not the member of the cooperative societies. Dispute is not touching
-- 3 of 12 --
: 4 : Notice of Motion No.1356 of 2018
the business of defendant society and there is no requirement to issue
mandatory notice. It was also submitted that as per the clause 45 of sale
deed till the formation of the apex body plaintiff is liable to maintain
the common area of R12 sector, which is not within the control of new
society and purchasers are liable to pay the amount. It was also
contended that the amount is calculated in proportionate basis and the
proportionate share of the plaintiff is also deducted from the total
expenses. It was further submitted that plaintiff is not concerned with
the land and the society and they are claiming maintenance charges
only in respect of land in R12 sector, which is not under control of the
society. It was submitted that the plaintiff is having lien and plaintiff is
under obligation to maintain the area.
5. Ld. Counsel Jitendra Tiwari for the defendant submitted that
relief as claimed by the plaintiff is not maintainable. A suit is barred by
limitation. Details of bills are not given. The claim is disputed, demand
is vague, the consent is the blanket consent, which cannot be enforced.
It was submitted that the plaintiff is not coming before the Court with
clean hand and there was no cause of action and prayed to the dismiss
the motion.
6. Heard argument of both the parties. Perused the material on
record.
7. Upon considering the hearing and perusing the material on
record it is apparent that the plaintiff is registered company and
developer. This suit is concerned with R12 sector. Admittedly, 21
buildings were to be constructed in this R12 sector, out of it 20
buildings are constructed. 8 Cooperative societies has been formed and
-- 4 of 12 --
: 5 : Notice of Motion No.1356 of 2018
3 are yet to be formed for this sector. Purchaser is the member of the
defendant society and he has been handed over possession of his
concerned flat. On completion there would be 11 registered Co
operative societies in R12 sector having multi storied buildings. Each
society has a area and building under its maintenance.
8. The suit is concerned for open spaces in R12 sector which are
being commonly used by all the residents of buildings that are
constructed in this sector and for maintenance of open space and
common amenities a apex body/federation is to formed. The claim of
the plaintiff is regarding the maintenance of this open space in R12
sector. Plaintiff relied upon the clauses in agreement for sale. As per
Clause20 the purchaser had agreed not to create third party interest
in the suit flat till all the dues of the plaintiff are cleared. Further as per
clause 27 of the sale deed the apex body/federation is to be formed by
all the cooperative societies for management of common road/street
lighting, common garden, play garden alongwith other amenities
including swimming pool. As per clause 45 the occupier of the flat is
liable to pay apex body expenditure and additional apex body
expenditure in proportionate to the respective built up area of their
concerned premises/flat. The purchaser had agreed to pay such charges
as determined by the builder in proportionate of his share. As per
submission of the counsel for plaintiff this charges are to be paid to
them till the formation of apex body. By virtue of this clause
plaintiff is maintaining the common area in R12 sector and is charging
for maintenance and its upkeep of the area in R12 sector.
9. As per the defendant this is the blanket consent obtained by
the plaintiff during the registration of sale deed. That the consent
-- 5 of 12 --
: 6 : Notice of Motion No.1356 of 2018
obtained by the plaintiff from the purchaser in clause 42 is blanket
consent and is not consent in the eyes of law and they relied upon the
judgment in M/s. Dosti Corporation Vs. Sea Flama Coop. Hsg. Soc.
In this case builder had applied for construction of public parking lot
without obtaining consent of the plaintiff's Coop. Hsg. Soc. As per the
plaintiff therein entire construction was to be carried out by the builder
for residential purpose only and not for commercial purposes and any
such commercial construction would reduce the open space and
common area in violation of regulation 23 of Development Control
Regulation (DCR). On the other hand defendant therein relied upon the
agreement, wherein it was mentioned in the first schedule that the
builder/promoter was entitled to develop the entire land described in
the schedule and thus he was constructing the building on the entire
land in phasevise manner as per plan approved or to be approved by
Municipal Corporation. Upon considering the hearing the Hon'ble High
Court observed that the blanket consent taken in agreement would
defeat the public policy and would dilute purposive object and intend of
the legislature and would not eliminate the abuse and null practices,
which is sought to remedy. The Court also relied upon the judgment of
Mahduvihar Coop.Hsg.Soc Vs. M/s. Jayantilal Investment & Others
2010 (6) Bom CR 517.
10. Upon considering the hearing, provisions of Maharashtra
Ownership of Flat Act ( MOFA) and cited case laws, it is apparent that it
relates to Section 7 (1) of the MOFA and the restriction placed on the
builder regarding subsequent development in view of additional FSI
that may become available without previous consent of the flat
purchasers. It was observed that the consent has to be a informed
consent, which is to be obtained upon full discloser by the developer of
-- 6 of 12 --
: 7 : Notice of Motion No.1356 of 2018
entire project. A blanket consent or authority obtained at the time of
entering agreement of sale would not be consent contemplated under
MOFA. The case in hand does not deals with the further development
but is concerned with the management of common area in R12 sector.
In the agreement for sale this is informed to individual flat purchasers
and they agreed to it. In pursuance of this agreement plaintiff is
maintaining the common area and incurring expenditure for it. It is not
the grievance or the case of the purchasers or defendant that the
plaintiff is not maintaining the common area. Further, the plaintiff is
not supposed to maintain it for perpetuity but would maintain it till the
formation of apex body. Thereafter the apex body would be put in
charge of the maintenance. Thus, considering the facts and
circumstances of the case the consent obtained cannot be said to be a
blanket consent when the facilities are enjoyed by the purchasers. Thus,
in the humble opinion of this court the cited case law in M/s. Dosti
Corporation cannot be applied to the case in hand.
11. It was also argued that as the notice u/s. 164 of Maharashtra
Cooperative Societies Act,1960 (MCS Act) is not given and due to
this the suit is not maintainable. As per section 164 of the MCS Act a
suit cannot be instituted against the society or any of its officer in
respect of any act touching the business of society and until expiration
of 2 months notice. It was argued that as the notice u/s. 164 is not
given a suit cannot be instituted.
12. Ld. Counsel for plaintiff relied upon the judgment in Deccan
Merchant Vs. Dalichand (1961) 63 Bom.L.R.418, wherein the Hon'ble
Apex Court has observed that five kinds of dispute are mentioned u/s.
91 of MCS Act. It was further observed that the word business in this
context does means affair of the society because election of office
-- 7 of 12 --
: 8 : Notice of Motion No.1356 of 2018
bearers, conduct of general meeting and management of the society
would be treated as an affairs of the society. The word business has
been used in narrower sense and it means actual trading or commercial
or similar trading activities of the society, which the society is
authorized to enter under the act, rules and ByeLaws. It was also
observed that if the society owns the building and let out part of it,
which is not required for their own purposes, it cannot be said that
letting out of those part is a part is the business of the society.
13. Now in the case in hand whether to restrain the society or
prevent the society from issuing NOC would be the dispute touching the
business of society would depend upon the nature of the society and
the rules of byelaws governing it. Upon considering section 164 of MCS
Act and cited case law it is evident that the word business has to be
interpreted narrowly and it means principal activities of the society
which directly touches the business of the society and it does not
include activity ancillary or incidental. Similarly, business does not
include every affair or every activity that is done by the society and
thus, it cannot be said to be business of society. Defendant in this case
is the cooperative Housing Society. The main activity of the society is
to manage the flats, common area facility, to provide amenities to its
members. Hence, admitting members, issuing no objection certificate
as prayed in the suit, cannot be said to be the principal business of the
society as defined u/s. 164 of the MCS Act. It is a ancillary activity.
Thus, issuing NOC is not the act touching the business of society. Thus,
this Court of the opinion that the notice u/s. 164 of the MCS Act is
not mandatory.
-- 8 of 12 --
: 9 : Notice of Motion No.1356 of 2018
14. Injunction is covered under Order 39 Rule 1 and 2 of CPC.
For grant of injunction it is settled position in law that the plaintiff has
to be satisfy the court, that he has a prima facie case, balance
conveyance lies in his favour and irreparable loss and injury would be
caused to him if injunction is not granted in his favour. The Court
would now consider the case of the plaintiff on these principles of law.
15. Ld. Counsel for plaintiff relied upon the judgment Manohar
Lal Chopra Vs. Rai Bahadur Rao Raja Seth Hiralal reported in AIR
1962 SC 527. In this case the Hon'ble Apex Court has observed that
the Court have no inherent jurisdiction to issue temporary injunction in
circumstances which are not covered within the provisions of Order 39
of CPC. There is no such express provision in section 94 which expressly
prohibits the issue of a temporary injunction if not covered by Order 39
of CPC. It is also observed that the provision of Code are not exhaustive.
16. Upon considering the hearing it is prima facie apparent that
the suit is regarding R12 sector, which is to be comprised of 21
building and 11 cooperative Housing Societies. It has common area,
internal road, drainage line, recreation facilities, including gardens,
security, etc., which are not manged by the concerned Cooperative
Housing Society but are managed by the plaintiff. Similarly, it is also
not the case of defendant’s that plaintiff is not maintaining the common
area and is not incurring the expenses for which this recovery suit has
been filed. It was also submitted that some of the members are paying
their dues as per clause 45 of the agreement for sale. Thus as per
clause 45 prima facie the purchasers who is the occupier of the flat is
liable to pay the maintenance charges till the formation of apex body.
As observed earlier the consent obtained by the plaintiff from this
-- 9 of 12 --
: 10 : Notice of Motion No.1356 of 2018
purchasers is not the blanket consent. Thus, considering this it can be
said that plaintiff has prima facie case. As the plaintiff's are maintaining
the common area in R12 sector the balance of conveyance lies in their
favour.
17. Now the Court will see whether plaintiff would suffer
irreparable injury if an order injunction is not passed in their favour.
Irreparable injury means that there is no alternative remedy available to
the plaintiff except grant of injunction i.e. required to protect him from
injury. It simply means an injury which is not rectifiable or reparable.
The injury means it cannot be adequately compensated in terms of
money. The impugned suit filed by the plaintiff is recovery of money
suit. Plaintiff is demanding the amount incurred by him for
maintenance of R12 sector alongwith interest thereon. Plaintiff wants
that the defendant be restrained by an order of injunction from issuing
NOC for creating third party interest whatsoever in nature in the suit
flat. Being a recovery suit plaintiff has not pleaded as to how irreparable
injury would be caused to him if the injunction is not granted in their
favour. In the opinion of the Court and being the money recovery suit
no irreparable loss would be caused to the plaintiff. Considering the
relief claimed by them which can be compensated in terms of money. As
the lis is pending and even if the purchasers creates any third party
interest in such case new owner of the suit flat shall be liable to
pay the decreetal amount if any passed in favour of the plaintiff.
There would be no multiplicity of proceeding as the title of the suit flat
shall pass with all its right and liability. Thus, the Court is of the opinion
that even though the plaintiff has made out a prima facie case and
balance conveyance lies in its favour, no irreparable loss caused to them
if injunction is not granted in their favour.
-- 10 of 12 --
: 11 : Notice of Motion No.1356 of 2018
18. Plaintiff in this case is not a member of society and is a third
party not concerned with the affairs of the society. That as per clause 38
(a) of the ByeLaws of the Cooperative Housing Society no objection
certificate is not required to transfer the shares and interest of the
transferrer to the transferee. Thus, it makes clear that a member of the
society can transfer his own shares to other person, who is not a
member of the society without obtaining no objection certificate of the
society. It also implies that consent of the society is not required prior
to the transfer of the flat. This ByeLaws are adopted by the society
at the time of registration of the society u/s. 8 of MCS Act. They are
approved by the registrar of the Cooperative Society which is
registered as per Section 9 of the Act and had its santity. ByeLaws of
the society are enforceable.
19. Thus, if the ByeLaws of the society does not stipulate or
mandates about the obtaining NOC from the Society. In the opinion of
the Court in such cases Court cannot ask a member to obtain NOC from
the plaintiff prior to creating any third party interest. Thus asking the
defendant to obtain NOC from the plaintiff would be like asking them
to function against the their own ByeLaws or would be like asking to
society to behave in contravention of its own ByeLaws. A particular
thing which is not mandated in ByeLaws cannot be asked to society to
perform it. A society cannot be asked to perform in particular way
when it has its own rules and regulations in place. Hence, the
defendant cannot ask his members to obtain NOC from the plaintiff
prior to creating third party interest in the suit flat. Thus, no injunction
as prayed can be granted in favour of the plaintiff. Hence, considering
this accordingly I pass the following order.
-- 11 of 12 --
: 12 : Notice of Motion No.1356 of 2018
: ORDER :
Notice of Motion No. 1356 of 2018 is dismissed.
Anand.L.Yawalkar
Judge,
City Civil & Sessions Court,
Date: 29.01.2019 Gr. Mumbai
Dictated on : 29.01.2019 and 30.01.2019
Transcribed on : 31.01.2019
Signed on : 31.01.2019
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
On 01.02.2019 at 1.20 p.m.
UPLOAD DATE AND TIME Mrs. P.R.Vengurlekar
NAME OF STENOGRAPHER
Name of the Judge
(With Court Room No.)
H.H.J. Anand.L.Yawalkar
C.R.No.31
Date of Pronouncement of
JUDGMENT/ORDER
29.01.2019
JUDGMENT/ORDER signed by P.O. on 31.01.2019
JUDGMENT/ORDER uploaded on 01.02.2019
-- 12 of 12 --